The Memphis appeal. [volume] (Memphis, Tenn.) 1886-1890, 1887-01-12

| seven thousand, nine hundred and
ntne bends With average interest
Also 6227 cOmpromiss bonds with -
average interest Of t30.................. 1856 $40
s3.el7 ,557
soit vill be seen that q fraction oyer one
| third Of these new, or settlement" bonds
is comp1std Of interest, without estimating
the large amounts Of interest absorbed in TO
bond, funded under the four preceding fund
ingao.s:
that upon tic blsis Of the present valuation
Of property Ia Tennessee, and present rate
ftax ton thereof, toSether with the other
sources OF reyen ne az nov collected-unless
there should be extraordinary appropria-
tione-tnd aiter taking up this Treasury
| certiho ttes,' substituting that portion Of
Torhctt ISSUE falling due this year. there
would he annually such surplus as 20 justify
the sailing ia and taking up usch year Of at
east $3.50, 900. 100 Of tbs settlement bonds, be-
| ginning with Ter cents. This would
grsdualy absorb our bonded ibdebtedness
without increasing the pro,e't rate OF tax
alton. In proportion 20 the development
and increased value of the properly OF our
| state, the present tax rate could be reduced
and sill aooomp ish this absorption of our
bonded In ebttdness.
| When the act Of March Is. 1888. known as
the iunding bill, was passed, Tennessee
b ,nds were worth but little over half Of
| what they new are. Considering the large
amount OF interest that has been alb sorOed
uuder the var 0as fu aiding acts, II il believei
| state Of Tennessee has paid a larger prop1r
| ton OF its indebtedness on the dollar han
any other Of our seeding Southern States.
feel that cannot ieave tnis subject with
out EXPRESSING my high appreciation of the
c operation OF my associates On the BOai d
| tho tsmptr0ller and Treasurer, and also of
the SERVICES Mr. Wm. II. SimO ton, the
Clerk Of tho Funding Board. Mr.. Simon
| tanfa nv NJ fafniltartgv
which oams under the consideration Of tho
Board, his business qualifications, prom t-
ness and attention 10 the dut es Of his posi-
tion, have rendered his services Of inesti-
mable ADVANTAGE Ia this arduOus uLdortak-
ing Of fundiog he State debt.
BANK or TENNB- sBE-OLD AND NEW
ISSUE.
In this connection, | would state that one
o the most serious endorsements encoun
tered in the naturalization Of tho States
financial affairs, has resulted from tho
States relations with the Bank of Ten
nessee.
The Bank Of Ternesse, was established by
an act # the Gen-ral Assembly, passed
January 10, 1888 Ths pirent bank was To-
oa'ed at Nashville, and ten br Inchos ia diff
lereut. parts Of tho state. The twelfth sec
ton OF the banks charter provided III At bills
or notes isfued by the b ink shou be rrce v
able ia payment Of taxes and other moneys
due the state The bank continued in OK
istencs until February Ii, 1865, whsn an act
wac passed ito wind up and settle its bust-
ness. Under that act proc seoiugs we're in
ST. uted BY the Attorney General of the
STATE, in the Chanosry Court. at Nasty lie,
on the 10th diy. OF May, 1866, VIII CHI placed il,
affairs ia liquidation.
Although the bank legally existed until
1865, it practical y ceased when this assets of
the mother bank we're removed from Nash
vile, on the 18th day Of Februsre, 1862. after
tho capture of Fort Donelspn by the armies
of tho United States. 10 to that date the
bank had been an exceedingly Profitable in
vestmen TO the State.
noe or bills TO the amount OF sl0,970,8ll.
While the greater portion of this wss re-
deemed by the bank, about s., 800. 900 " rs left
outstanding, and was demanded by the
The State promptly redeemed all OF this
Bank ofTennessse money, which was issued
prior 10 May q, 1861. the day on which Ten
nesseo passed the secession ordnance, and
But It was believed that the money issued
by the bank after May 6, 1861, commonly
known as new issue, or rorbett money"
was not binding on the State because il was
dueing the late war between the States,
hence obnoxious 10 thu Fourtee nth Amend
msnt Of the Cons itution land accordingly.
an act WAS passed by the Log stature prOhib-
iting new i.sus notes from being received BIZ
the roVanue collectors for taxes and public
dues. Thi. gave r'se TO most prot acted
litigation, but before detailing the history of
that litigation, / should state that the total
amount oil new issue noes issued by the
bank, as appears from Its books. is as fol-
lows:
Mother bank, 1924
M0ther Ohnk, 1907 '....,...........,,...,.. lT,0O
BrRDcnes, ..;,.,..................... 776 800
Total neW issue ,....,........,..,..... SD, 299
The question was whether or not the State
should DO made TO pay this large sum of
new issue notes By receiving them, for
tho case of Keith VS., Clarke. in Madison
county, Tenn. Mr.. Keith tenderod in pay
ment of his taxes two twenty dollar bills,
one Of which was dated June |, 1851. The
Tax Cclleo or. refused TO receive it, where.
upon Mr.. Keith paid his taxes in Gu reney
under protest, and brought suit under this
statute to oomRl him to receive the money.
This case was carried to the supreme Court
OF Tennessee three lines, and twice to the
Supreme Court OF the United states 1t was
held that tho burden of proof rested upon
the state 70 show that any bank bill offered
was issued in aid fthe rebellion, the result
ofWhich was to make the State liable, for
the reason thai II was praotio lily impossible
TO show for what any particular bill Rad been
issued by tho bank. Three of the Justices of
tho supreme Court Of the United States dis
sentct from the majority opinion. The last
decision "a tho case was rendered by the Su-
pteme Court OF the United States early
in 1888 Q06 U. s., i6D 1t was now apparent
that tho new issue notes tine regular notes
20 which the bills ! Ike that rendered in Keith
VS. Clarke belonEedl had to be redeemed.
Tho lezslature was then in session, and on
gagged IN the settlement of the State debt-a
question which had so long and fercely dis
tracisd the people OF Tennesses. 1t was
tho RECEIVERS hands in tho old case of the
state VS.. 1hs Bank of Tennessee aud others,
In he Chancery Court OF Nashville, would
not exceed SS0,ON; Crediti9g this sum and
y great deal Of this new issue money during
tho war. II was apparent that at least sl.20l,-
600 of II would DO presented, and about that
much Of the taxes and revenues Of the State
would 6e by 1t absorbed. The meney would
and tax payers would buy, Of course,
whom they could save something
by so doing. II was therefore apparent to
the most unob,eryant mind that if any
material portion Of this vast sum was forced
upon tho State and permitted TO absorb the
revenues in 1888 aud the years Immediately
tollowing-ths 500 settlement, which had
been agreed upon after so many years OF dis.
cord, would fail from its birth. The reve-
nues were needed TO pay the current OK
ponses and the interest on the public debt,
and If the new issue money absorbed tho
taxes levied TO pay the interest, the interest
would have to go unpaid, there being then
no authority to make negotiations to meet
this demand.
In accordance therefore with the policy
ana pup 80 OF the people OF Ienne see aud
the dominant party which elected that Leg
islAture and myself, II was resolved by all
means TO protact and carry out in good faith
and true purpose the settlement Of the State
dobt rs an object paramount.
IL should be stated, too, that many of the
holders Of the money appreciated the embar.
rassmeut ocoasionod by the untimely decis-
ion in the case referred to, and expressed a
Willingness to acguiesce in such meas arcs ms
should DO deemed proper 10 DO adoptod. On
Mach y, 1882, an act was passed and ap-
proved by the Governor allowing the holders
ofall the notes ofthe Bank of Ten nessee. OK
copt fractional currency and post notes."
which latter amounted to stG6 900, and we're
OF the denominations Of $500 and $1,000 to
fund tn, same in the "rreasury certif-
eates,' payable in one, two, three, four and
hgo years. These certificates were made re-
eeiv able for the taxes 'or the year in which
the same foil duo, and also for back taxes
which were payable DO fore 1881. By this ar
rangement the money which the State was
held bound to redeem was distributed over
tho period Olive years.. and tho holders at
the same time protected.
The holders Of po st-notes or fractional cur
rency were dissatisfied, and made prepara-
tons to compel tho state to redeem their
money by legal proceedings. In the case Of
the state VS.. the Bank, 10 the Chancery
Oourtat NASHVILLE, reference was had with
that view. A case was made UP and taken
to the supreme Court az Jackson. Three